Australian GDP Growth Declines to 0.6%

Marcus Jacob
05 Sep, 2012
New York City

Australian GDP growth in the June quarter fell to 0.6% after rising at 1.4% in the previous quarter. The economy is expected to slow further in the second half as the iron price drop to a 3-year low.

[R]7:30 PM Sydney – Australian GDP growth in the June quarter fell to 0.6% after rising at 1.4% in the previous quarter. The economy is expected to slow further in the second half as the iron price drop to a 3-year low.[/R]

Australia’s economic growth continued but the economy is losing momentum. The economic growth would have been significantly lower if the government spending had not picked up in the quarter.

Australian GDP in the quarter to June rose 0.6% from the previous quarter and advanced 3.7% from a year ago quarter, according to the data released by the Australian Bureau of Statistics.

The GDP expanded at 1.4% in the previous quarter and surged at 4.4% annually in the quarter to March.

Government spending contributed to 0.3 percentage point increase in the quarter after adding only 0.1 percentage point in the previous quarter. Net exports contributed 0.3 percentage point and household consumption contributed the same as in the previous quarter.

The economic growth is expected to decline in the second half as the Australia’s largest export, iron ore, price hover near a 3-year low.

The ASX 200 index slipped 24.70 to 4,278.80 and the broader All Ordinaries slumped 27.89 to 4,297.66.

The Australian dollar decreased to US$1.012 after the release of GDP data from the previous close at US$1.023.

Stock Movers

BHP Billiton Limited dropped 51 cents to $31.05 and, Rio Tinto Limited declined $1.03 to $49.34 and Fortescue Metals Group plunged 29 cents or 8.5% to $3.12.

Iluka Resources slumped 38 cents or 4.2% to $8.60 and Lynas Corporation Limited slid 0.5 cents to 59.5 cents. Newcrest Mining added 1 cent to $25.02. Kingsgate decreased 12 cents to $4.33 and Whitehaven Coal slipped 9 cents to $2.96.

Transfield Services slid 4 cents to $1.66 billion; engineering contractors WorleyParsons declined 26 cents to $25.15 and Monadelphous Group plummeted 57 cents to $19.55.

Oil Search Limited decreased 6 cents to $7.34 and Santos Limited slipped 13 cents to $11.31 and Woodside Petroleum added 2 cents to $34.72. Sundance Energy added 1 cent to 70 cents.

Caltex raised $550 million in an offering to fund its refinery overhaul in Sydney and restructure its business.

Brambles decreased 2 cents to $6.82 after the pallet maker reiterated its profit outlook and said that the current fiscal year beginning has met management expectations despite the uncertain economic conditions.

Seven West Media gained 3 cents to $1.35, Ten Network lowered 0.5 cent to 37.5 cents and Fairfax Media down 0.5 cents to 41.5 cents.

News Corp gained 27 cents to $23.32 and the company trimmed annual bonus for Rupert Murdoch and James Murdoch despite the rising shareholder demand that both should leave the company and give back past bonuses paid at the time of the evolving hacking scandal crisis in the U.K.

News Corp also nominated former U.S. Secretary of Labor Elaine Chao and former Colombian president Alvaro Uribe on the board.

Harvey Norman Holdings slid 2 cents at $1.99, Woolworths slumped 25 cents to $30 and Kathmandu slipped 7 cents or 4.5% to $1.38.

Commonwealth Bank of Australia decreased 8 cents to $54.55 and Bank of Queensland slid 1 cent to $7.52. ANZ plummeted 95 cents to $24.79. National Australia Bank slipped 13 cents to $24.97 and Westpac Banking Corporation declined 37 cents at $23.95.

Macquarie Group slid 2 cents to $27.27. Perpetual Limited climbed 53 cents to $27.43 and the financial services reported profit dropped 57% on restructuring charges.

David Jones Limited down 3 cent $2.35 and Wesfarmers jumped 34 cents to $35.34. Billabong International Limited lowered 2 cents to $1.27. Breville Group slipped 4 cents to $5.39. Harvey Norman slid 2 cents to $1.99.

Toll Holdings decreased 6 cents to $4.60, Leighton plummeted 57 cents to $14.85 and property developer

Qantas slid 1 cent to $1.13 and Flight Centre slumped 47 cents to $22.90 and Virgin Australia closed unchanged at 45 cents.

QR National gained 3 cents to $3.53 and Telstra slipped 2 cents to $3.84.